News About Nepalese Shares Market ( NEPSE )

Major IPO offering by Natural Spirits Nepal Taps Muktinath Capital – Set to Expand Liquor Empire

2025-09-01T17:21:00.003+05:30

Kathmandu, Nepal – Natural Spirits Nepal Limited, the innovative force behind popular brands like Seto Bagh Vodka and Sarangi Whisky, has announced a significant step in its corporate journey. The company has officially appointed Muktinath Capital Limited as the issue manager for its highly anticipated Initial Public Offering (IPO). This pivotal agreement was formalized during a signing ceremony between Natural Spirits Chairman Asim Sitaula and Muktinath Capital CEO Kabindra Dhoj Joshi.

This strategic move will see Natural Spirits Nepal issue 15,00,000 ordinary shares to the general public, constituting a substantial 20% of its total issued capital.
This IPO is poised to be a landmark event, inviting public participation in one of Nepal's rapidly ascending liquor producers.

Established on December 14, 2014 (2071 Mangsir 14), Natural Spirits Nepal has quickly carved out a niche for itself in the competitive Nepali liquor market. The company boasts a state-of-the-art production facility located in Galchi, Dhading, complemented by its central administrative office in Hadigaun, Kathmandu. With an impressive annual production capacity of 12 million liters, Natural Spirits is well-equipped to meet growing consumer demand.

Currently, the company's portfolio includes the widely recognized Seto Bagh Vodka (30% alcohol by volume) and Sarangi Whisky (40% alcohol by volume). Demonstrating a continuous drive for innovation and market expansion, Natural Spirits is also on the verge of launching a new product, Rara Blues Vodka (40% alcohol by volume), which is expected to further diversify its offerings and appeal to a broader consumer base.

Natural Spirits is dedicated to producing high-quality liquor, underpinned by a philosophy that blends modern technology, innovative product development, and robust branding strategies. The upcoming IPO is not just about raising capital; it signifies the company’s ambition to significantly expand its market footprint and solidify its standing as a leader in Nepal’s dynamic liquor industry. Investors and consumers alike will be watching closely as Natural Spirits Nepal embarks on this exciting new chapter.

7.37%Cash Dividend: Professional Bikash Bank

2011-10-27T10:13:00.001+05:30

The BOD meeting of the Professional Bikash Bank Ltd has decided to provide 7.37% cash dividend to share holder which is subject to approval from NRB & upcoming AGM.

Source:
nepalstock

10.14%Bonus Share & 11.06%Cash Dividend of Reliable Finance Ltd

2011-10-27T10:10:00.001+05:30

The 81 the BOD meeting of the Reliable Finance Ltd dated 2068/07/06 has decided to provide 10.14 % bonus share and 11.06% cash dividend. The proposed dividend and bonus share is subject to approval from NRB and upcoming AGM

14% Cash Dividend of Araniko Development Bank Ltd.

2011-10-27T10:08:00.000+05:30

The BOD meeting of the Araniko Development Bank Ltd dated 2068/07/03 has decided to give 14% cash dividend subject to approval from NRB and its upcoming AGM.

Source:
jamb

30% Cash Dividend & 40% Bonus Share of Chilime Hydropower Co. Ltd.

2011-10-27T10:06:00.001+05:30

The 216th BOD meeting of the Chilime Hydropower Co. Ltd dated 2068/07/02 has decided to give 30% Cash Dividend and 40% Bonus share subject to approval from its upcoming AGM.

Source:
jamb

7.37% Cash Dividend of Bank Of Asia Nepal Ltd.

2011-10-27T10:04:00.001+05:30

The 81th BOD meeting of Bank Of Asia Nepal Ltd dated 2068/7/6 has decided to provide 7.37% cash dividend to its share holders from the porfit of fiscal year 2067/068. The porposed dividend is subject ot approval from NRB and its upcoming AGM

Source:
Nepse News.

Commercial banks raise home loans rate

2011-07-25T16:01:00.001+05:30

More than half a dozen commercial banks have hiked home loan rates by as much as 1.5 percentage points - a move which will disappoint borrowers deeply, citing increase in cost of capital. Banks like NMB Bank, Global Bank, Nepal Industrial and Commercial (NIC) Bank and KIST Bank have enforced the new rates from the new fiscal year, starting from Sunday this week. Following the change, NIC Bank´s home loans rate has jumped to as high as 16.49 percent. Similarly, rate of NMB Bank also stands at over 16 percent, while that of KIST Bank has gone up to the range of 14 to 16 percent.

The fresh hike has also jacked up the industry average rate of home loans to just over 16 percent. So far, the industry average rate was over 15 percent. "We had to raise the rates mainly because the central bank´s directives sought us to close the interest rate gap between different savings schemes to 2 percent or less. This raised our cost of capital," said Upendra Paudel, chief executive of NMB Bank. The central bank has asked the banks and financial institutions to bridge the gap in rate between different savings products, mainly as bankers, while luring fresh deposits, offered higher rates to new depositors only, leaving old accounts holders deprived of due interest return.

Banks were offering as high as 10 percent interest return to new depositors, whereas older depositors were offered as low as 3 percent. "This is not fair. The banks must bridge the gap to 2 percent or less," NRB had said in its directives. Though a few banks had instantly complied with the directives, most of the BFIs are just gearing up to implement it. As a result, sources told Republica that more banks may follow the suit and raise lending rates because they are ´left with no choice´ as they have raised the rate of minimal interest rate to bridge the gap.

"As liquidity problem has not faded away in a large number of banks, they cannot lower the higher rates. And the unwanted raise of lower savings rate has gone up to increase cost of capital," said the source. Interestingly, the latest hike in lending rate has come contrary to what Nepal Bankers´ Association (NBA) had announced about a month ago. With the ease in liquidity in leading banks, NBA had said they have lowered the interest return to corporate clients by as much as a percentage point. "We believe this will eventually lead to drop in lending rates," NBA president Ashok Rana had told Republica then.

Source:
myrepublica

No bonus for Rastriya Banijya Bank staff

2011-07-25T15:58:00.001+05:30

Citing on the directive issued to Nepal Oil Corporation last August, the Commission for Investigation of Abuse of Authority (CIAA) said that the demand of receiving bonus of Rastriya Banijya Bank (RBB) staff could not be justifies. Appearing before State Affair Committee under legislature parliament today, CIAA secretary Bhagawati Prasad Kafle said that the bonus should not be distributed unless the bank recovers its accumulative loss. The anti-graft body last August had directed Nepal Oil Corporation (NOC) to revoke its decision of bonus distribution. "The corporation cannot distribute bonus citing profit for one year since it is reeling under accumulative loss," the CIAA had said.

The anti-graft body had also instructed the government not to distribute bonus at any other public entities suffering accumulative loss, even if they recorded profit in a specific fiscal year. "The directive issued to NOC should be taken an example for all the other public enterprises, if they are incurring accumulative loss," Kafle reiterated, adding that the decision will save state coffer.
Source:
tht

Chilime Hydro Power Co. Ltd Initial Share Allotment Result

2011-07-25T15:42:00.003+05:30

Chilime Hydro Power Co. Ltd. Initial Share Allotment Result
CLICK FOR ONLINE RESULT OF Chilime Hydro Power Co. Ltd

Purnima Development Bank Initial Share Allotment Result

2011-02-14T20:55:00.000+05:30

>>> Purnima Development Bank Initial Share Allotment Result
CLICK FOR ONLINE RESULT

NIC Bank & Brihat Investment to promote home loan products

2011-02-14T20:12:00.001+05:30

NIC Bank and Brihat Investment entered into and agreement today to promote home loan products. "The trained agents from Real Estate Marketing Agents (REMA) from Brihat Investment will be working as direct selling agents for the NIC Bank to sell home loan products," said Purnima Rajbhandari, CEO of Brihat Investment that has been advocating and lobbying with the banks, the government and Nepal Land and Housing Developers' Association (NLHDA) to establish REMA profession.

Brihat Investment has trained the REMA professionals for ethical buying and selling of houses, she said, adding that they have the expertise to asses and the ascertain quality of an asset and help buyers find good value for their investments. Under the agreement, REMA will facilitate the prospective buyers for acquiring home loan from NIC Bank for purchase of residential houses/apartments.

NIC Bank has demonstrated its leadership in the home loan league through its popular product NIC Ghar Subidha for its comprehensive product bundling. "The Bank believes that the arrangement with Brihat Investment-REMA, our customers will have better access to our services and quick turn around time in availing home loans," said the bank. The licensed agents for the real estate sector will help boost the sector as they can bring professionalism in the sector that has been facing slowdown recently, Rajbhandari said, adding that the NIC Bank and REMA both can work jointly to facilitate the home buyers.

Currently, the real estate and housing sector has around Rs 200 billion investment and the central bank has also been seriously working on to help the sector that creates employment. Though, the land plotting and land transaction has been discouraged, the central bank has also accepted contribution of the real estate and housing sector to gross domestic product (GDP). Meanwhile, the central bank governor has also urged the developers to build houses that are under common people's purchasing capacity. "The housing products should be within the purchasing capacity of the people," he said in an interaction recently.

Source:
tht

Commercial banks' Q2 NPA almost doubles

2011-02-14T19:45:00.001+05:30

The Non-Performing Assets (NPA) of commercial banks seem to have almost doubled in the second quarter of the current fiscal year. According to the unaudited financial figures of the second quarter of the current fiscal year, the average ratio of NPA to the performing loans in the second quarter of the current fiscal year is at 0.88 per cent which was 0.48 per cent in the corresponding quarter of the previous fiscal year.

The slowdown in realty and housing sector can be accounted for the surge in NPA of the commercial banks this season. The bankers have been suggesting the central bank Nepal Rastra Bank (NRB) to relax the ceiling on housing and real estate lending, citing the slowdown in realty to have affected the performance of banks as most of the commercial banks' loan portfolio is dominated by these sectors.

Among the unaudited financial statements released by the twelve commercial banks Bank of Asia Nepal (BoAN), Kumari Bank Ltd (KBL), Kist Bank Ltd (KIST), Siddhartha Bank Ltd (SBL), Global Bank Ltd (GBL), Laxmi Bank Ltd (LBL), Citizens International Bank Ltd (CZBL) and Prime Bank Ltd (PBL) are the commercial banks expected to report an increased NPA for the second quarter in comparison to that of corresponding quarter in the previous fiscal year. Standard Chartered Bank (SCBL), Nepal SBI Bank (SBI) and DCBL Bank Ltd (DCBL) are expected to report a drop in NPA in the review.

NPAs are one of the key indicators that gauge the financial strength of any bank or financial institution. NPAs for banks are nothing but loans gone sour. It is a loan that can not be recovered from the customer within stipulated time, especially those exceeding 90 days of the predetermined period. The NPA does not yield any income to the banks in the form of principal and interest payments. NPAs eat into the income of the financial institutions as the primary source of income of financial institutions are the interest payments by borrowers.

Source:
tht

Citizens Investment Trust to double paid-up capital to Rs 250m

2011-02-14T19:44:00.000+05:30

The Finance Ministry has approved a budget of Rs 12.5 million to be invested in the Citizens Investment Trust (CIT) to increase its paid-up capital to Rs 250 million. The government has a 10 percent stake in the CIT with Rastriya Beema Sansthan holding 26 percent, Nepal Rastra Bank 13 percent, the Nepal Stock Exchange 10 percent and the public 20 percent of its shares.

The CIT gives options to people for their savings and benefits them by investing their savings in the capital market and other businesses. The CIT aims to increase its paid-up capital to Rs 250 million from Rs 125 million. It is planning to issue rights shares on the basis of 1:1 ratio within the current fiscal year to increase the capital. "Given an increase in our business, we are in greater need of increasing our paid-up capital which paves the way for further business," said CIT executive director Rishiram Gautam.

The CIT may have to increase its paid-up capital to Rs 500 million to continue its mutual fund type Citizens Unit Scheme because the newly brought mutual fund regulation has provisioned that a mutual fund should have a paid-up capital of Rs 500 million. "This is another reason that we are set to increase our paid-up capital," said Gautam. The CIT's activities related to the capital market are governed by the Securities Board of Nepal.

It has been mobilising financial resources of around Rs 22 billon currently. Of that amount, it has deposited more than Rs 9 billion in commercial banks, Rs 3 billion in finance companies and Rs 2.5 billion in development banks. It has invested Rs 1.62 billion in government bonds, it has issued credit worth Rs 3.22 billion to its members, and put Rs 2 billion in debentures and Rs 650 million in term loans. Currently, it is also planning to diversity its investments in the infrastructure sector including hydropower, housing and road projects.

Source:
ekantipur

Team studying Nepal Bangladesh Bank, NCC merger

2011-02-14T19:37:00.002+05:30

NB Group has initiated a study to merge Nepal Bangladesh (NB) Bank and Nepal Credit and Commerce (NCC) Bank, the two commercial banks that the group promoted. "A taskforce formed under the leadership of our Chairman Prithvi Raj Ligal is studying how the merger can be accomplished and where the bank will stand following the merger," Ratna Raj Bajracharya, chief executive of NCC Bank, said. The taskforce is yet to finalize its report. The group took the initiative for the merger mainly considering present market conditions, the position of both banks in the market and also the incentives promised by the government and the central bank for facilitating mergers.

Both NB Bank and NCC Bank have been slow performers with their financials in the red at different intervals, and experts attribute this to undue interference and anomalies on the part of the promoters. "Instead of competing with each other, it is better that the two banks be merged. It will instantly enhance our capacity, assets base and branch network, enabling us to become more competitive in the market," said Bajracharya. Recently, the group had managed to get final nod from the regulator -- Nepal Rastra Bank -- for the merger of Nepal Sri Lanka Merchant Bank (NSLMB), another financial institution promoted by the group, into NB Bank.

Interestingly, the financial health of all three banks and financial institutions promoted by the group had turned bad at different intervals, and this, according to NRB, was due to irregularities by bank promoters themselves. While NSLMB is still in bad financial shape and is facing difficulty paying back depositors even after the maturity of their accounts, NB Bank was also declared a troubled bank by the central bank, which took over its management in 2007. It was only in mid-January, 2010 that the central bank released its control and handed over the management to a newly elected board of directors.

NCC Bank had also nearly faced intervention by the central bank. However, this was avoided after promoters withdrew from the board and handed over management to Bajracharya, promising not to intervene in bank operations. Since then, the bank´s net worth has turned around from a negative net worth of Rs 510 million to a positive net worth of Rs 1.61 billion. Its non-performing assets have dropped from 31.7 percent to 3.69 percent. Currently, NCC Bank is operating with 17 branches. NB Bank has a similar number of branches.

Source:
myrepublica

Kumari Bank & Oxfam team up to help farmers

2011-02-14T19:37:00.001+05:30

Kumari Bank Limited (KBL) and Oxfam International, Nepal have joined forces to provide credit financing to farmers in the Mid-Western Region under Oxfam's Enterprise Development Programme (EDP). Radhesh Pant, chief executive officer of Kumari Bank, and Scott Saiia, country director of Oxfam, signed a memorandum of understanding in this regard on Thursday. As per the agreement, the bank will provide revolving credit facilities (up to the defined limit) to agricultural cooperatives identified by Oxfam.

The bank will provide loans to 1,050 farmers through the Janakalyan Agricultural Cooperative, Surkhet. The project aims to boost high-value vegetable seeds and develop market access for their products at both domestic and international levels. The major objective of the project is to encourage women's participation for farmer-led enterprises and boost their income level.

Speaking on the occasion, Pant said that the move would narrow the existing gap between rural people and banking services. "Despite a significant growth in the number of banks and financial institutions in the country, a majority of rural people are deprived of financial access; and such initiatives will help rural people to benefit from financial services," said Pant. He added that they aimed to institutionalise and develop other projects in the coming days.

Source:
ekantipur

5% Cash Dividend of Annapurna Bikas Bank

2011-02-14T19:34:00.000+05:30

The BOD meeting of the Annapurna Bikas Bank Ltd company dated 2067/10/24 has decided to give 5% cash dividend subject to approval from NRB.

Source:
nepalstock.com

Nepal Rastra Bank to amending gold guideline

2011-02-14T19:33:00.000+05:30

The Nepal Rastra Bank (NRB) is preparing to recommend the Ministry of Commerce and Supplies to review the guideline on gold and silver management. The revision is targeted at simplifying the existing gold distribution provision. The guideline introduced on Dec. 27, 2010 has allowed commercial banks to import 15 kg of gold per day and release it in the domestic market.

However, only few traders approached to designated commercial banks to buy gold. After the implementation of the guideline, three commercial banks have imported 150 kg of gold so far. Of the quantity, only 60 kg has been procured by traders. "We will soon recommend the Ministry of Commerce and Supplies to review the guideline," said Chinta Mani Shiwakoti, director at the Foreign Exchange Department of NRB. He said the NRB will soon hold a meeting with ministry officials in this regard.

Recently, the NRB had held a discussion with traders and bankers regarding import of the yellow metal and its distribution in the market. In the meeting, traders had strongly demanded revision of the guideline, saying it was `impractical'. It has been more than a month since the government implemented the new guideline. However, only 2-4 kg of gold is sold from banks per day. Currently, the gold demand is around is 25-30 kg per day and gold imported illegally from India fulfills a large portion of the demand.

Tej Ranta Shakya, president of Nepal Gold and Silver Dealers Association, said although gold brought from India is expensive by some Rs 300 per 10 gm, traders opt for Indian gold as there are no hassles in acquiring it. "Over the last month, we only recommended for 15 kg of gold," he added. A total of 16 commercial banks are listed by the Nepal Bankers' Association to import gold. With low response from traders, only three banks¿NIC, Bank of Kathmandu and Laxmi¿have imported 50 kg of gold each as of Feb. 8.

"Demand from traders is low," said Saroj Guragain, head of the Financial Market and Commodities division of NIC Bank. He said traders are reluctant to procure the yellow metal from banks. Due to low sales, banks are also facing the burden of increasing holding cost of gold. Therefore, many banks are not interested in importing gold. As per the guideline, commercial banks can sell 1 kg of gold at a time. But traders said small traders are finding it difficult as their requirements are low. The provision to submit the details of at least 50 percent of gold bought earlier to buy new gold is also not practical, they said.

"The guideline was targeted for small traders. However, from the looks of things, it has only helped big traders," said Shakya. He said the government should make a provision that allows banks to sell gold to wholesalers too, so that they could distribute gold to small traders.

Source:
myrepublica

Agricultural Dev. Bank's branch earns 12.3 million in 6 months

2011-02-14T19:30:00.000+05:30

The Agricultural Development Bank, Kawasoti Branch, made more than Rs. 12.3 million profits during the first quarter of the current fiscal year, said Branch Manager Sombilash Devkota. He said the farmers visit the bank for banking services due to its minimum interest rate offer compared to other private banks. He said the bank was providing loan at 12 per cent interest rates to the farmers which, he said, is lower than other banking institutions. Similarly, the bank collected Rs. 13.3 million deposits during the same period of this fiscal year. The Kawasoti branch of the bank has provided loans to as many as 1,472 local customers.

Source:
tht

Nepal Rastra Bank to liquidate Samjhana Finance

2011-02-08T21:30:00.001+05:30

Nepal Rastra Bank (NRB) on Monday decided to send Samjhana Finance Company (SFC) into liquidation and declared United Development Bank (UDB) a ´troubled bank´. The central bank has also asked the management of SFC to furnish clarification within 15 days. SFC, which has mobilized deposits of Rs 180 million from general public, has a total liability of Rs 640 million. "The NRB board meeting took the decision, keeping in view the financial position and management status of the two financial institutions," an NRB official told Republica. The financially ailing SFC has mobilized Rs 20 million in deposits from the Army Welfare Fund operated by the Nepal Army. It has an outstanding loan worth Rs 210 million and its non-banking assets have been calculated at Rs 300 million. Headquartered in Banepa of Kavre district, SFC has two branches in Lalitpur and Kamalakshi of Kathmandu.

Saroj Bajracharya, manager of SFC´s Lalitpur branch, is in police custody for investigation, as most of the non-performing loans of SFC have been found issued by the branch. Bijay Mani Acharya, manager of SFC´s Kamalakshi branch, has left for greener pastures abroad after tendering resignation. Sources say the company is facing difficulty in preparing financial statement in the absence of experience manpower. The company has been found operating financial transactions through fake accounting statement after NRB, a year ago, directed it not to mobilize deposits and issue loans.

The central bank initiated investigation against the bank after depositors, whose money the company had deposited into fake accounts, asked the management to return their deposits. Though NRB has decided to send the company into liquidation, deposits of general public are not at risk as the collaterals pledged against loans issued are under its possession. The company has around 5,000 depositors.

The company managed to recover loans worth Rs 70 million over the past six months and returned the amount to depositors. NRB had declared Samjahana Finance a ´troubled´ financial institution about a year ago on the basis of its weak capital base and high non-performing asset (NPA).

Source:
myrepublica

Sebon guidelines for share structure of merged firms

2011-02-08T21:27:00.001+05:30

The capital market regulator is working on bringing in new regulations regarding the determination of share structure of the merged public companies. As the merger and acquisition (M&A) of various banks and financial institutions has been gaining momentum since some time back, Securities Board of Nepal (Sebon), the securities market regulator, has also felt the need for introducing a new regulation that will clarify how the share structure of the merged companies has to be determined.

"Sebon is doing internal homework on the regulation for the merged companies regarding the determination of share structure," said Niraj Giri, director of Sebon. "There is a need for clarifying how the merging companies will distribute the shares to the common shareholders so that the minority shareholders' interest is not damaged," he added.

There is no clear-cut rules set by any authority that dictates how the share should be distributed in case of the merger. Since Sebon is the apex body to regulate share market, the responsibility of preparing the guidelines regarding the matter falls on it. Moreover, most of the banks and financial institutions that are in the process of merger are listed in the secondary market. Before the merger is accomplished, the companies need to finalise the share structure. If both the merging companies have issued shares to the public then determining the new share structure has to be more carefully done so that the shareholders of the two entities will not feel duped.

There have already been four mergers of the financial institutions have taken place in the history of Nepali financial institutions. The recent merger is the one between class `A' financial institution Nepal Bangladesh Bank and Nepal Sri Lanka Merchant Banking and Finance Ltd that took place last month. Apparently, the shareholders of NSLMB are entitled to get the shares of NBBL in the 2:1 proportion that is for every two units of NSLMB's shares the shareholders will get one unit of NBBL's share.

Both the fiscal and monetary policies for the present fiscal year has encouraged merger of financial intermediaries such as banks and financial institutions (BFIs). The central bank specially has made it clear that it will support the merger of financial institutions rather than opening of new banks and financial institutions in the present scenario that has been crowded with the banks and financial institutions. The fiscal policy had even introduced some incentives to encourage mergers. The merger is supposed to facilitate the capital requirement of the financial institutions and reduce their operational costs as well along with creating space in the crowded financial institutions.

Source:
tht

Employees Provident Fund gives 1.5%dividend

2011-02-08T21:19:00.001+05:30

Employees Provident Fund (EPF) has distributed Rs 1.09 billion dividend to the 450,000 provident fund depositors. The Board meeting of the Employees Provident Fund on January 26 has decided to distribute 1.5 per cent dividend to the depositors. The fund has posted Rs 1.45 billionnet profit last year. From the profit, the EPF has also deposited Rs 50 million and Rs 198.37 million in Depositors' Welfare Fund and Reserve Fund respectively.

Source:
tht

Number of blacklisted loan defaulters on rises

2011-02-06T21:53:00.001+05:30

The number of blacklisted bank loan defaulters has begun to rise again after a three-year declining trend. The number started to rise from the second half of the last fiscal year after a new Nepal Rastra Bank (NRB) directive allowed Banks and Financial Institutions (BFIs) to include defaulters in the blacklist irrespective of loan amount, provided that they meet the basic inclusion criteria. Although this is an alternative provision, defaults of loans worth more than Rs 2.5 million should be compulsorily blacklisted.

How the number of blacklisted firms and individuals is peaking is evident from the fact that a total of 156 names were blacklisted as of Jan. 26 of the current fiscal year compared to 171 in the entire last fiscal year, according to the Credit Information Bureau (CIB) which keeps records of those blacklisted by BFIs. Since fiscal year 2006-07, the number of blacklisted firms and individuals had been falling until fiscal year 2008-09. "After the new NRB provision, the number of blacklisted firms and individuals started to go up," said Anil Chandra Adhikari, chief executive officer of CIB.

Among the major firms blacklisted over the last six months are Cosmic Air, Avco International, Memento Apparels, Mount Everest Brewery and Triveni Cement. No BFI can lend to a blacklisted firm or an individual. Not even the remaining installments of loan, says the NRB directive. The government can also cancel passports of blacklisted individuals as per the recommendation of BFIs. According to the NRB directive, banks may blacklist individuals or firms in the event of cheque bouncing and write-offs. "These kinds of additional provisions have resulted in increase in the number of blacklisted defaulters in FY 2009-10," states CIB's annual report.

BFIs should blacklist any firms or individuals if their cheques bounced for three consecutive times. The NRB directive has also provisioned that BFIs should blacklist those involved in fraud¿use of counterfeit cheques, drafts, debit and credit cards and bills. Those not repaying credit card debts should also be blacklisted. However Adhikari of CIB said the NRB provision that BFIs could blacklist defaulters of loans worth below Rs 2.5 million only after blacklisting defaulters of loans worth more than the amount has created confusion. As of FY 2009-10, there were a total of 2,152 blacklisted defaulters with total outstanding amount of Rs 29.81 billion.

Sudhir Khatri, chief executive officer of DCBL Bank, said it was natural to see rise in the number of blacklisted defaulters given the increased number of BFIs. "Current political and economic situation of the country also resulted in increased loan defaults," he added. During the first quarter of the current fiscal year non-performing loans of commercial banks went up by Rs 2.93 billion. The NPL level rose by 0.61 percent to 3.15 percent. "The default rate will further go up with stagnation in the real estate sector, and industrial sector facing acute power outrage and higher interest rate," said Khatri. Bankers say that that there has not been 100 percent payment of interest too in recent days. Not only the number of blacklisted defaulters, number of new borrowers also increased by more than 25% in FY 2009-10 compared to the previous year, as per the record of CIB.

Source:
ekantipur

Nepal Rastra Bank no to mutual fund operations

2011-02-06T21:48:00.001+05:30

An effort of two commercial banks to establish a mutual fund has hit a snag after the central bank refused to permit them to jump into the business, stating that Bank and Financial Institutions Act (BAFIA) does not include mutual fund operations as areas of activities for the banks. Nabil Bank and Kumari Bank had recently sought permission from the central bank to set up mutual fund. "We had to say no to them because BAFIA, the law governing banks and financial institutions that defines areas of operations, lacks ´mutual fund´ in the list of activities that the banks can venture into," said a source at the Nepal Rastra Bank (NRB).

NRB´s denial, meanwhile, has almost closed the new investment avenue for small investors, because capital base and other requisites provisioned in the existing Regulations on Mutual Fund make only the commercial banks eligible to kick-start the business. According to Mutual Fund Regulations enacted a year ago, any corporate entity interested to establish a mutual fund must have a minimum paid-up capital of Rs 1 billion. Apart from that, the interested institution must also have completed five years of operations, earned profit for last three consecutive years and have paid-up capital not less than its net worth.

"Clearly, only commercial banks are eligible institutions to establish mutual fund. We are surprised over the central bank´s denial to let the banks jump into the business," a senior official of Securities Board of Nepal (Sebon) said, preferring anonymity. The official even argued that BAFIA was not a hindrance, because the act also has a clause whereby the central bank can authorize banks and financial institutions to undertake financial activities, even if it is not clearly stated in the law. "It´s just a matter of will. There are ample examples of banks operating mutual funds all round the world," the official added. NRB officials, however, said that they were not negative toward banks venturing into mutual fund operations. "It is just that we need policy clearance. Once we get that, we will readily allow banks to set up mutual fund," said the NRB official.

Sebon in recent years had pushed for mutual fund -- an instrument of collective investment in which money from a large number of investors is pooled -- in a bid to widen the capital market and also to pledge additional investment opportunities to the small investors. The pool is managed professionally and investment is made in securities, like stocks, bonds and short-term money market instruments among others. Typically, the fund manager buys and sells the fund´s investments in accordance with the fund´s investment objective. Sebon - the stock market regulator -- is entrusted with the responsibility of overseeing the operations of the manager, ensuring that it is managing the fund appropriately in the best interests of the investors.

Source:
myrepublica

Cooperatives contribute 10pc GDP

2011-02-06T21:41:00.000+05:30

The cooperatives run in various parts of the country have helped improve the economic situation of the country, increasing contribution every year to the growth of Gross Domestic Product (GDP). The contribution by the cooperatives to the financial sector has reached 10 per cent, according to the Department of Cooperative. Public interest and attraction have been increased towards cooperatives with its easy expansion and wide outreach and subsequently it has discharged significant role for the economic transformation of the society, according to the Department.

Over 2,000 cooperatives have been registered across the country during the first five months of the current fiscal year, the Department informed. The number of cooperatives stood at 20,000 in the country as of last year, according to Registrar of the Department, Sudarshan Dhakal. ´Number of cooperatives immoderately went up during the last three years, we are now mulling to render quality´, said Registrar Dhakal, adding that the future of cooperative is bright since it has the strength to cover all sections of society and economic transformation of the country through cooperative is not a far cry if it gets support from all sides.

Financial transaction worth over 100 billion is being carried out through cooperatives every year, according to the Department source. The share capital of cooperatives working in different sectors has touched Rs. 9.36 billion. Similarly, the cooperatives have accumulated savings Rs. 58 billion and made investment of Rs. 61.54 billion, the Department made public. The statistic of the Department reveals that some 200,000 office-bearers are associated and more than 50,000 are in direct employment in the cooperatives.

The State should put the cooperatives on priority while making investment to steer ahead the national economy to growth and reform, recommended cooperative activists. The cooperatives got an environment conducive to its flourishing following the adoption of open market economy in 1995. Though cooperative marked its start many years back, its promotion was not witnessed for a long time.

Now there are 8,888 savings and credit cooperatives, 3,465 multipurpose cooperatives, 2,964 agricultural, 1,205 consumers, 82 science and technology (transportation, communication) 66 coffee, 50 health, 75 tea, 35 herbal and 41 bee-keeping cooperatives in operation in Nepal, according to the data provided by the Department.

Source:
myrepublica

IPOs worth Rs 580m okayed this FY

2011-02-06T21:35:00.003+05:30

The combined value of initial public offerings (IPOs) made during the first six months of the current fiscal year was up significantly compared to 2009-10 despite a fall in the number of issuing companies. The Securities Board of Nepal (SEBON) gave its nod to nine companies to make IPOs amounting to Rs 580.03 million during the review period compared to 11 companies permitted to make IPOs worth Rs 395.40 million in the previous fiscal.

According to the stock market regulator, two finance companies, five development banks, one hydropower company and one insurance company received SEBON's go-ahead to IPO during the first half of this fiscal year. Among the nine companies getting SEBON's approval, Gurans Life Insurance Company made the largest IPO of 1.08 million shares.

Meanwhile, the value of rights shares approved was half that of 2009-10. SEBON okayed the issue of rights shares by 16 companies worth Rs 3.37 billion against Rs 6.13 billion previously. Nine finance companies, four development banks, two commercial banks and one insurance company were cleared to issue rights shares in the first six months of this year. Sanima Bikas Bank's rights issue was the largest among the development banks. Dhruba Timilsina, corporate finance department chief at SEBON, said that the supply of shares in the capital market had surged after Nepal Rastra Bank instructed BFIs to increase their paid-up capital by 2012-13.

Source:
ekantipur